Advanced wealth management tools

Menu

Post navigation

T-Advisor updates weekly a list of market opportunities from several stock exchanges around the world. We sum up a selection of the best ones:

EUROPE

-Rubis (Euronext Paris). The group has its roots in the acquisitions of 2 French operators, compagnie Parisienne des Asphaltes And vitogaz (LPG Distribution) in 1994. By guaranteeing sound management, strategy and financial resources, Rubis turned these 2 regional family-owned SMEs into structured international business units at the front of their respective market segments

-Lockheed Martin Corp. (NYSE). It’s an American global aerospace, defense, security and advance technology company with worldwide interest. It was formed by the merger of Lockheed Corporation with Martin Marietta in March 1995

ASIA-PACIFIC

-BHP Billition Ltd. (Australia Stock Exchange). Is one of the world´s largest minning company. Was formed through the merge of Australian Broken Hill Propieraty Company Limited (BHP) and the Anglo-Dutch Billition plc.

Find more opportunities from the main exchanges in the world on our module “Market opportunities” in T-Advisor.

What stocks and funds were the best in June? T-Advisor publishes its ranking taking into account the score. T-Advisor patented score provides an asset rating (bullish, neutral or bearish) based on key performance indicators and technical analysis.

This is the buzzword right now in technologies and finances: blockchain. The most disruptive technology, something like personal computers in 1975 or internet in 1993, or, as the Harvard Business Review published: the first native digital medium for value, just as the internet was the first native digital medium for information.

But what is it? This article explains it very simply: think about a book where each page is a block with a statement of any transaction. Every time a block is filled and added to the chain (a new page), a new block is generated. Blocks are linked to each other in a chronological order, as pages in a book.

Initially, blockchain was created as the technology that sustained the cryptocurrency bitcoin. Now, banks are investing a huge amount of money here, because they perceive the disruption of this technology.

Blockchain is a huge ledger running on million of devices and it is capable of recording anything of value, as money, equities, funds, bonds, contracts…It is a safe and private peer-to-peer system because trust does not depend on central institutions, but on network consensus, cryptography, collaboration and clever code. What does it mean immediately? It is a risk for intermediaries, essentially in finances. People can sign contracts or exchange assets without knowing each other but being confident that they will not be cheated. Without intermediaries, there will be increasing savings (between $16 and $20 bn a year, from different sources).

Empowering of users, because they control their information and transactions.

High quality data, widely available.

Durability, reliability and longevity, hacker-proof.

Immutability of transactions: nobody can erase an operation

Transparency, because block changes are viewable by all parties.

Simplification: there is an only ledger, not several.

Faster clearing and settlement transactions, in minutes.

Lower cost transactions, due to the elimination of intermediaries.

However, this technology has still some challenges. Deloitte mentions that it is a very new technology without any regulation that consumes a great deal of energy from computers. Although it helps save money, it also has huge initial costs. Finally, as it is a new technology, there are still concerns about security, privacy, integration with other systems and the leaning to accept it by the users.

Financial experts say that blockchain will change some processes as know-your-customer, due diligence and anti-money laundering. This banking compliancy costs will disappear. Once a bank did it with a customer, other financial entities will then be able to use it, because this data are under customer control. Several time-consuming processes will disappear (and the attached costs) and the role of the adviser will deeply change. It value will be linked to their knowledge, not to their ability to make transactions. This is only the beginning of the next future and its name is blockchain.

What stocks and funds were the best in April? T-Advisor publishes its ranking taking into account the score. T-Advisor patented score provides an asset rating (bullish, neutral or bearish) based on key performance indicators and technical analysis.

Think about this situation. Imagine that you are client of any wealth manager and the staff sends you a report about the best chances for your investments, with recommendations and comments to obtain the best performance. Then, you talk to a friend, who is also client of the same wealth manager and you both comment about the report. You discover that both reports are personalised and are not the traditional recommendations’ standardised reports that these entities publish regularly. Each one have personalised information and you both discover that the entity has used your full data to design the best report to meet your needs. Then, you explain your friend several changes in your investments. Both have the same risk profile, but your portfolios (and the historic operations) have nothing to do to another.

The example could be larger, but it is enough to introduce the changes that we will live soon in the wealth management branch. The expression behind these changes is artificial intelligence. Shortened as AI, it is not a Steven Spielberg film. It is far from fiction, because it is reality. The learning capability of machines increased exponentially in the last years and the soar will keep on. There is a combination of big data analysis, natural language and machine learning. Big data analysis provides the capability of learning better not only about the customer, but also about any trend that goes around him. Natural language allows machines to interpret and generate spoken and written language. Machine learning uses algorithms that can learn and make predictions on data.

This will be the mix that we will see growing in the next years. The transformation will be deep in the whole financial sector. Currently, a 26% of assets and wealth manager firms already use AI to inform the next big decisions, according to PricewaterhouseCoopers. Money is flowing increasingly there, because all agree that this will be the next step for fintech business.

For instance, natural language processes will help comply better with regulations, as machines will learn immediately the changes and adaptations will be easier in platforms. This will also has a very relevant collateral effect managing risks more efficiently. The client will obtain a high-improved user experience with new interfaces. The advisor tasks will focus in asset gathering and portfolio monitoring. They will also become more responsive to client needs and increase the added value of their services.

Robo-advisor in the first deep step in this change. There will be further changes with a greater automation. Robo-advisors and human advisors will experience several transformations in their tasks and roles against clients. They, the clients, will be winners and the only losers will be entities (not only human, also fintech) that will not adapt to the new wave.